English Legal System and Corporate Law
Section 1 – Nature of the legal systems
The structure of the English legal system:
The English legal system has a hierarchical court structure and the decision of the higher court is binding on the court which is below in the hierarchical order. There are different areas of law which can be classified as
- Criminal and civil law,
Criminal law is associated with the wrongs which are considered to be offensive against the whole community and these crimes are prosecuted in the name of the state (Riera, 2015). Private prosecution is a possible but rare phenomenon.
Everything else is covered by civil law which covers the vast domain of road accident victims charging compensation or suing the opponent, disputes related to tax decisions by the HM revenue and customs.
Civil law and criminal law are two completely different terminologies and it is important to understand the sections of each terminology in order to apply them in accordance with the offence.
- Private and public law
Both private and public law are different aspects of civil law.
Private law is applied in order to resolve disputes between individual parties, for example an accident victim suing the liable person for the accident (Keating et al, 2014).
Public law is a set of legal principles that decide the mode of power that an authority can apply including public authorities and government as well. Public authority needs to apply its power according to the laws and the public law has been designed in order to make sure that the power is not misused by any authority.
As far as the English Court system is concerned, it consists of:
- Magistrates’ court
- Country courts
- The Crown Court
- The High Court
- The Court Appeal
- The Supreme Court
Importantly, the Crown Court only hears the criminal cases and the Counter Court hears both the criminal and the civil cases.
These courts work through a hierarchical system. In this system, the appeals can pass up through the courts and the decisions of the higher courts need to followed by the courts which are below in the hierarchical order (Riera, 2015.). The House of Lords had been considered the highest authority of law traditionally but the membership of EU has meant that the European Court of Justice is the court for the cases which are associated with the EU law. In 2009 Supreme Court replaced the House of Lords and Supreme Court has the power to hear appeals from other European Countries which are the members of the Commonwealth.
The main legal personnel in the legal system are:
- Judges and
- Government legal officers.
In the English legal profession the lawyers can be classified as the barristers and the solicitors. These two type of lawyers deal with two different types of work. The solicitors deal directly with the clients but the barristers are usually called by a solicitor. There are six different categories of judge:
- Supreme Court Justices
- Lords Justices of Appeal
- High Court Judges
- Circuit judges
- District judges
Fig 1: Law making bodies and forms of Law
Source: (self generated)
The above diagram explains the hierarchical structure of the English Law system. It is important to have an effective legal system for the promotion of the rule of law. Major institutional changes have been implemented in the last fifteen years which includes creation of the Ministry of Justice in 2007, creation of the Legal Services Commission (2000) in order to provide legal services to the poor, creation of the Supreme Court in 2009, Tribunal Services in 2007, Judicial Appointments Commission (2006) and so on. It is important to develop and implement new reforms and develop the legal system in such a manner, that people from different economical strata can have access to justice (Riera, 2015.).
Role of government in law-making and application of statutory and common law:
The legal systems of UK are based largely on the law that has been developed through the decisions of the judges. The legitimate structures inside the United Kingdom were developed in such a way such that it circles around each of the relevant discussions and law making subjects, concerns judge-made (law made through decisions by judges essential to pick cases brought before them - called "standard law" or case-law) until around the seventeenth century. Since that time, new laws and law change have continuously been acknowledged through Acts of Parliament, regularly pushed by methodologies of the Government of the day. Law making bodies developed their own particular sorts of standard law, with Scotland being especially unmistakable from the rest (Keating et al, 2014). A declaration of law made by a judge for a circumstance can wind up discernibly official on later judges and can thusly transform into the law for everyone to take after. Notwithstanding whether a particular calling (in actuality called a perspective) by a judge sitting in court while picking a case ends up noticeably legitimate (according to the rule of "look decisis) on later judges depends upon two essential components:
The calling must be made by a court of satisfactory status. Judges are exclusively the essential authority (frequently called courts of first case) and other minor legislative bodies are not allowed to issue confining perspectives. These judges may not hear full legal disputes but instead are concentrating on exact disclosures (Keating et al, 2014). Along these lines, it is the higher courts, which issue confining choices, and the lower courts must take after them. In these courts, there has been a plan of specialist recording and itemizing since 1865 (now called the Incorporated Council of Law Reporting for England and Wales, which conveys The Law Reports and The Weekly Law Reports).
While the common law comes from the judiciary and involves decisions directed by the judge, statutory laws circle around unwritten laws made by government law making bodies. Thus, the operational level of the two varies hugely; while the former is procedural; and follows written and unwritten framework, the latter is substantive. Also known as exhibiting a prescriptive nature, statutory laws originate from government legislative discussions and their constant improvement adhering to changing environments. While the common law follows judgments by judicial bodies as binding and determining, state governments or municipal departments pass the statutory laws. These are essentially meant to hold/safeguard the interests of the mass and aid in resolving problems as they arise. Absence of constitution is one out of the aftereffects of the way United Kingdom and its political and legal foundations have created since 1066. Another outcome is that the foundations did not separate the limits and powers of the three unmistakable branches of the express, the authority, the lawmaking body, and the lawful. For example, the organization (or authority) is involved MPs and colleagues who are similarly nominated heads from government bodies (the House of Commons and the House of Lords). In the United States by separate, the President and people from the Cabinet, (the authority), are separate from the administering body, (the Senate and the House of Representatives).
Section 2 – Impact of the law on business organizations
Employer’s legal obligation:
There are several duties of the employer towards the employees and it includes:
- Occupational health and safety
The Health and Safety Act 1974 is the primary legislation which covers the occupational health and safety in Great Britain. It is the primary responsibility of the executive and the local authority to enforce this particular act along with certain other Acts and Statutory instruments which are relevant to the working environment. The act emphasizes on the liability of the employer associated with the health and safety hazards of the employees (Barrett and Lewis, 2016). As per the act an employer is responsible for the health and safety risks of the employees even if the members of the public are exposed to those risks.
It is not appropriate for the employer to assume that the employees will take precautions against the health and safety risks to which they are exposed during the duration of their work. Health and safety regulations require that the employers need to carry out sufficient and suitable risk assessment in order to maintain the workplace safety.
- Workers’ compensation
Worker’s compensation indicates a form of insurance that provides wage replacement and medical benefits to the employees who have been injured in the course of working hours. The workmen’s insurance scheme of UK operated from 1897 to 1946 and it was created by the Workmen’s Compensation Act 1897. The workmen’s compensation Act 1906 was replaced by the state compensation scheme under the National Insurance Act 1946 (Torres and Jain, 2017). Under this act it has been stated that all employers are obliged to purchase compulsory Employer’s Liability Insurance in accordance with the Employer’s Liability Act of 1969.
It is important to understand that the employees need to establish that their employer has a legal liability to pay compensation and it will be a breach of the statutory duty under the tort of negligence. The compensation can be sought directly from the Third Parties Act, 2010 (Kendrick, 2017).
It is the responsibility of the employers to prevent bullying and harassment from the workplace. It is the breach of an act if cases of harassment are tolerated by the employers. Harassment as per the definition provided in the Equality Act of 2010, is an unwanted conduct which is related to a protected characteristic and it has the effect of violating an individual’s dignity. Bullying and harassment indicates towards a behavior which is responsible to make someone feel intimated or offended. As per the equality act, 2010 harassment is against the law and the unwanted behavior can be related to age, sex, disability, gender, race, marriage and civil partnership, sexual orientation, marriage or civil relationship and religious belief (Middlemiss, 2015).
If an employee complaints of being bullied or harassed it is the sole responsibility of the manager, human resources department and the trade union representative to look through the matter. If the organization does not solve the issue the employee has the right to take further action through employee grievance procedure and can take legal action at an employment tribunal.
- Equal opportunities
The Equality act became the law in October, 2010 by replacing the previous legislations like the Race Relations Act of 1976 and the Disability Discrimination Act of 1995. This act has been implemented in order to ensure the consistency of the workplace environment which is fair and compliant to the law (Countouris, 2016). There are limited circumstances through which an employer can justify the discrimination or a discriminatory act which is defined as a “proportionate means of achieving a legitimate aim”. It is a difficult process for the employers. An employer can take “positive action” in terms of law to help the employees or aspirant applicants whop think they are at the side of disadvantage because of a protected characteristic or under-represented in the organization and have specific needs which is of protected characteristic (Countouris, 2016).
As per the Equal Pay Act men and women included in part time or full time employment have right to avail equal pay which in law indicates no less favorable pay, terms, benefits and conditions in their contracts where they are working equally.
Employees in the private, public or voluntary sector have a legal public sector equality duty in the workplace in order to prevent and eliminate discrimination and to promote equality in terms of opportunity.
Relevant employment contract law to have a potential impact upon the business regarding the provided scenario
As per the employment act of UK all employees come under the employment contract with their employees. This contract or agreement sheds light upon the rights of the employees regarding employment conditions, employee rights, responsibilities and duties. These are known as the terms of the contract. Employee contract implies specific terms which indicates it is the duty of the employer to provide a safe and secure working environment for the employees. As per the provided scenario, the employee under consideration has severely injured herself and the hazard has taken place due lack of risk assessment and providing employee safety and security. The outlet was short of staff which is an organizational issue. The employee under no circumstances is responsible for the situation. As per the occupational health and safety act of 1974 it is the sole responsibility of any organization to provide adequate workplace safety and security to the employees (Torres and Jain, 2017).
This case is evidently breaching of the Health and Safety Act and the organization is liable for the health hazard of the employee. In this scenario, the employment contract is relevant because the employee can sue the organization if she has an official or legal employment contract. If she can establish that she is officially an employee of the fast food outlet, then it is possible for her to lodge a complaint against the store in which she is working. In this scenario the human resource management and the team leader who has failed to do the risk assessment properly and also have not been concerned enough regarding the workplace safety and security. The team leader is responsible for the safety measurement of the employees and he has subsequently failed to perform his job role accordingly as he was not monitoring the place.
Another important point that requires consideration is the fact that having an employment contract can help the employee to charge for the worker’s compensation. Worker’s compensation indicates an Employer’s Liability Insurance in accordance with the Employer’s Liability Act of 1969. It is important to understand that the employees need to establish that their employer has a legal liability to pay compensation and it will be a breach of the statutory duty under the tort of negligence (Torres and Jain, 2017). Here evidently, the team leader can be sued against the tort of negligence and the employee can charge for the Worker’s Compensation only if she can establish that she has an Employment Contract with the organization.
legal solutions to the business problems:
1)As per the Employment Contract any employee under any circumstances can steal from the organization. Perhaps the complexity of the case lies in the fact Calvin has been suspended under the suspicion of the employer. There is no specific proof against Calvin that he has performed the theft of which he is accused. He can necessarily complaint against his employer Donna as he can easily fight against the charges of theft. It is important to note that Calvin was not present in the scenario alone and there were other four employees who can be equally accused for the theft. Although Calvin here becomes fall prey to discrimination. No other employee present in the scenario was suspected by the employer. It evidently shows workplace discrimination.
As per the Equality act of 2010 Calvin can bring charges against the employer regarding the breach of the workplace equality policy that indicates every employee of an organization has the duty to maintain equality among the organization (Gowland, 2013). Another important fact which is noteworthy is that in this case Calvin has been harassed as he has been accused of theft without enough evidence against him. It falls under the section of workplace harassment which Equality Act, 2010 suggests is an unwanted conduct which is related to a protected characteristic and it has the effect of violating an individual’s dignity. The allegation of theft has evidently violated Calvin’s dignity. Donna can be sued for the charges of harassment and workplace discrimination. By practical law related to labor and employment Donna has breached her duty as an employer and Calvin can take legal action against Donna under the Equality Act. In this case as Calvin has been harassed by the employer he needs to take action against the employer under the Protection from harassment Act of 1997 (Davies, 2015).
2) As per this scenario Dan has invested in the insurance. The Insurance proposal has an error in it which can be considered as the accidental mistake on Dan’s part. As the insurance he claimed earlier for the damage of his first store was 23 months ago, it is possible for him to overlook the fact that the incident did not take place two years ago. Therefore, it is possible for the insurance company to negate the charges of compensation. The new store has been opened in a new location and Dan has applied for a fire insurance. However, there is an error in the proposal. But the fire in the new store has been covered under the insurance policy as he has not been notified by the insurance company that they are not covering the store damages. Therefore, Dan has been under the impression that the store damages are to be covered by the insurance that he applied for. It is important for an insurance company to act reasonably otherwise, it is possible for Dan claim for their breach of the insurance contract. However any legal action undertaken by Dan can be rejected by the insurance company as he has not complied with the requirements under the policy and all the provided information was not correct. Here Dan has provided honest and relevant information before taking the policy and has not misled the insurance company intentionally. However, it is possible for Dan to claim the insurance if he can provide enough evidence to support his valuation.
a. Explaining the concept of ADR along with its benefits:
ADR (Alternative Dispute Resolution) is a procedure based on settling the disputes without any litigation, such as negotiation, mediation or arbitration. The procedures of ADR are often cost low, however; the same process is more expeditious. They have increasingly being utilized in the disputes, which could otherwise result in the litigation including the claims based on personal injury, divorce actions and disputes based on high-profile labor. In addition, ADR can further refer to the variety of all the processes, which help the parties for resolving the conflicts or disputes without a trial (Folsom et al. 2012). The process of ADR includes collaborative law and neutral evaluation. The processes of ADR are generally less stressful, less formal and confidential less than the proceedings of the traditional courts. One of the primary reasons that the parties can refer the proceedings of ADR is that unlike adversarial litigations, the procedures of ADR can often collaborative along with allowing the parties for understanding the positions of each other. This process can allow the parties for coming up with the creative solutions, which a court cannot be legally allowed for imposing. Moreover, there are some general terms, which are associated with the procedure of ADR, are Arbitration, Arbitrator, Binding, Mediation, and Hearing (Posner, 2014). The benefits of using the ADR procedure give a support to the company, which have conflict issue with another company as well. ADR can often save money along with the speed settlements. In the process of ADR, such as arbitration or mediation, the parties play a vital role while resolving the conflicts along with resolving the company's own disputes.
This often can result in greater satisfaction, improved relationships, long-lasting outcomes, and creative solutions. M.P (2012) has stated that a trial is not the only way for resolving the legal dispute. Even, if the litigation already was begun, the parties can take an attempt at the negotiation along with the settlement using the ADR (Alternative Dispute Resolution). The process of ADR has various and multiple benefits along with their Hoffmann; the Estates Attorney along with Des plains can explain clearly how this process can help for resolving the disputes of business. The benefits of the process of ADR are; it can greatly reduce the costs by providing a clear, quicker and more streamlined resolution; this process gives a faster result and is more flexible as compared to another process. In addition, court cases, opinions, and judgments are usually considering public records, the process of ADR is confidential. The parties involved in the ADR can further use the process as the opportunities for preserving the relationship such as husband-wife, business partners-employer or business partners-employee (Nichols, 2012).
b. Providing two recommendations based on given scenario, comparing, and critically evaluating the effectiveness of both the recommendations
According to the given scenario, the best two recommendations for resolving the conflict between the two mentioned parties can be a meeting involving the CEO of both the companies and the second one making that software company business partner of the Antwon firm (Owyang and Sekhposyan, 2012). However, this partnership will be based on sharing the profit in the ratio of 60:40 because the Antwon Company does not completely dependent on the use of software, therefore, if this company makes the profit by using the software of Tyrell Company, then they need to share that profit. For doing so, the prioritized company, that is, Antwon Company needs to make a legal agreement, where, their partnership needs to be mentioned. The first recommendation can be achieved by conducting a meeting involving both the company’s CEO. In addition, within that meeting, both the company must learn about the practices of each other, so that if any conflict in future occurs, they can easily resolve (Kinicki and Kreitner, 2012).
Moreover, the CEO of both the companies must aware of terms and conditions of each company. As per the given scenario, both have to compromise with the on-going conflict, it is because they both have been losing the profit, as they are beneficial components for each other. In addition, while meeting with both the party's CEO and making a legal agreement is quite a different aspect from each other however both of them can play an important role in resolving the conflicts. The meeting will help each of the CEOs for understanding the terms and conditions of the other company, with which the first company has tied for using their product (Coffee Jr, Sale and Henderson, 2015). On the other hand, making a legal agreement will give a trustful platform, on which both the companies can perform their operations based on solo ship or partnership. However, the effectiveness of both the recommendations can enhance the relationship between these two companies, where, they can establish the trust with each other. Hence, no further conflict can occur in future. Moreover, within that legal agreement, both the parties have to involve and agree on the profit margin or ratio. As the Antwon Company deals with the investment firms, therefore, very few employee of this company is instructed to use the software only for predicting the markets.
Therefore, Tyrell Company can get less profit as compared to the first company. Moreover, the first company makes the payment of the second company on time, within a particular period so that conflict on at least this basis would not be raised further. According to Miller (2015), the first legal solution regarding the given conflict is not as effective as the second one, it is due to the reason that within the meeting, no paperwork will be carried out, so there will be no proper evidence, which can be used in future. On the other hand, Mann and Roberts (2015) has stated that both the legal solutions are as effective as required for resolving the given conflict, meetings will be a separate solution and the second one will be based on proofs and evidences, which cannot be broken by another company. In accordance with Allen and Kraakman (2016), both the legal solutions are not as effective as it is required for the chosen case, because, offering partnership for enjoying the profit will not work for more days because the share of profit is not enough. On the other side, meetings between both the CEOs can resolve the conflict externally, not by internally. The product of the software needs to be the latest one also, which further needs to be maintained by the Tyrell Company.